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Injury Investigations in Antidumping and the Super-Additivity Effect: A Theoretical Explanation

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  • Poonam Gupta

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  • Arvind Panagariya

Abstract

Empirical evidence shows that injury investigations in anti-dumping cases conducted by the United States International Trade Commission, the probability of a positive finding is higher when the number of defendant firms is larger, holding constant their total market share. In this paper we offer a theoretical explanation of this finding. We show that the presence of many exporters exacerbates the free-rider problem, which leads every firm to invest less on defense. Thus for the same market share, injury finding is more likely to be positive for many small sellers than a few large sellers.
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Suggested Citation

  • Poonam Gupta & Arvind Panagariya, 2006. "Injury Investigations in Antidumping and the Super-Additivity Effect: A Theoretical Explanation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(1), pages 151-164, April.
  • Handle: RePEc:spr:weltar:v:142:y:2006:i:1:p:151-164
    DOI: 10.1007/s10290-006-0060-1
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    References listed on IDEAS

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    1. Brander, James & Krugman, Paul, 1983. "A 'reciprocal dumping' model of international trade," Journal of International Economics, Elsevier, vol. 15(3-4), pages 313-321, November.
    2. Robert W. Staiger & Frank A. Wolak, 1994. "Measuring Industry-Specific Protection: Antidumping in the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994 Micr), pages 51-118.
    3. Thomas J. Prusa, 1998. "Cumulation and Anti-dumping: A Challenge to Competition," The World Economy, Wiley Blackwell, vol. 21(8), pages 1021-1033, November.
    4. Rodrik, Dani, 1986. "Tariffs, subsidies, and welfare with endogenous policy," Journal of International Economics, Elsevier, vol. 21(3-4), pages 285-299, November.
    5. Hansen, Wendy L & Prusa, Thomas J, 1996. "Cumulation and ITC Decision-Making: The Sum of the Parts Is Greater Than the Whole," Economic Inquiry, Western Economic Association International, vol. 34(4), pages 746-769, October.
    6. Staiger, Robert W. & Wolak, Frank A., 1992. "The effect of domestic antidumping law in the presence of foreign monopoly," Journal of International Economics, Elsevier, vol. 32(3-4), pages 265-287, May.
    7. Anderson, James E., 1993. "Domino dumping II: Anti-dumping," Journal of International Economics, Elsevier, vol. 35(1-2), pages 133-150, August.
    8. P. Tharakan & David Greenaway & Joe Tharakan, 1998. "Cumulation and injury determination of the European community in antidumping cases," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(2), pages 320-339, June.
    9. Bruce A. Blonigen & Stephen E. Haynes, 1999. "Antidumping Investigations and the Pass-Through of Exchange Rates and Antidumping Duties," NBER Working Papers 7378, National Bureau of Economic Research, Inc.
    10. Panagariya, Arvind & Rodrik, Dani, 1993. "Political-Economy Arguments for a Uniform Tariff," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(3), pages 685-703, August.
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    Cited by:

    1. Patrice CASSAGNARD, 2009. "Antidumping, Social Quality of Goods and Smear Campaign," Working Papers 10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2009.

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    Keywords

    Antidumping; cumulation; injury investigation;

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